I need your help interpreting that section of the Georgia laws. Am I wrong in thinking it meant that you can charge 16% simple interest rate on a loan less than $3,000 as long as the APR doesn't exceed 60%.

Yes, I know I have been in banking for many years and this should be old school but my brain just ain't what she used to be!!

Thanks

I believe you would be correct, ids. The point where you run into illegal rates on typical contracts is 60% APR, but you have an additional restriction on small loans of no more than 16% simple.

Thanks Joker.

O.k. let me revisit this one more time!! If we have a consumer loan that has an APR greater than 60% if it was the loan fee that put it over 60% is that permissible or wouldn't that still be a violation of the rule?

Violation.

You may be remembering a LONG TIME AGO, where if you keep records justifying your fee, it was not a FC. That was a mis-interpretation by the State and, at some point, they 'changed their mind' and said 'they didn't mean it'. Or, something to that affect and about that crude.

Thanks Joker. I had a loan officer questioning me about that and he asked if I would revisit the question again. Thought I was right!

I found the Official Opinion 2003-8 where it talks about it not being considered usery if the origination fee is the reason the APR is greater than 60% but can you find or tell me where to find the one they came back and said they changed their minds?

I'm still beating the horse to death!!

Found the Opinion that basically repealed the previous Opinion. It is 2003-9.

Thanks!

Don't you just love it! I guess that just confirms the old saying about "opinions".

Now, if you find where they repealed/changed/whatever the late charge part on mobile homes...let me know...k?

Just out of curiosity...anyone else following the Georgia usury law lawsuit against Synovus? They are basically trying to say that overdraft fees are considered interest.

http://caselaw.findlaw.com/ga-court-of-appeals/1626854.html

They are.

(for years they have been considered 'time value of money'). I have an opinion letter somewhere at home, or I'd give you a reference to it).

You can charge them, but you'd better stop at or before 60%...I haven't seen a system that can successfully handle that calculation on deposit accounts)

Having said that, and not reading the link (yet), what I'm referring to are daily OD fees...so maybe ^^^ is different. If so, I apologize!

In scanning it quickly, I'd say the following is what may have actually bit them in the bohonkus:

Synovus also charges an “Overdraft Collection Fee” if a customer's account remains in overdraft for seven days.

That is true. You can't really do the daily overdraft fee in GA. The fee cannot be based on the time value of money or it is considered interest. Usury will apply.

It's scary stuff!